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Innotrac Corporation Announces 2010 Fourth Quarter and Year End Results
Mar 31, 2011 (05:03 PM EDT)


ATLANTA, March 31, 2011 /PRNewswire/ -- Innotrac Corporation (NASDAQ-GM: INOC) announced financial results today for the fourth quarter and year ended December 31, 2010.  The Company reported revenues of $23.2 million for the quarter versus $21.3 million reported in the comparable period in 2009.  For the year ended December 31, 2010, the Company reported revenues of $79.6 million versus $100.0 million in the comparable period in 2009.  The increase in revenue for the three months ended December 31, 2010, was due to the addition of new clients and a net increase in revenue from existing clients, primarily from our eCommerce vertical.  The decrease in revenue for the year ended December 31, 2010, was primarily due to one of our larger retail and eCommerce clients closing their operations in 2009, the merger of one of our telecommunications clients resulting in the merged company utilizing in-house services for a portion of their fulfillment starting in third quarter of 2009 and overall softness in our Direct Marketing vertical during 2010 due to general economic conditions.

The Company reported net income of $218,000, or $0.02 per share, fully diluted, for the three months ended December 31, 2010, versus a net loss of $26.4 million, after recording a one-time, non-cash goodwill impairment charge of $25.2 million,  or ($2.09) per share in the comparable period of 2009.  For the year ended December 31, 2010, the Company reported a net loss of $2.7 million, or ($0.21) per share, fully diluted, versus a net loss of $22.7 million or ($1.80) per share in the comparable period of 2009.  

"During 2010 we controlled our operating expenses while maintaining our administrative and IT infrastructure to allow for a quick response to the economy when it improves.  For the second consecutive year, we ended the year with no outstanding advances on our line of credit," said George Hare, CFO.

"We continued our focus on our sales and marketing initiatives during the fourth quarter and are developing new service capabilities to support our clients' growth strategies.  Our joint venture with PVS Fulfillment Service GmbH in Germany allows us to expand our operations into Europe, an attractive market for North American brands.  Innotrac now provides the infrastructure and end-to-end services necessary for multi-channel merchants to successfully launch and operate an eCommerce business in this market. There is additional opportunity to support European marketers who want to expand into the North American market through Innotrac's network," said Scott Dorfman, CEO.

Innotrac

Innotrac Corporation, founded in 1984 and based near Atlanta, Georgia, is a full-service fulfillment and logistics provider serving enterprise clients and world-class brands.  The Company employs sophisticated order processing and warehouse management technology and operates seven fulfillment centers and one call center spanning all time zones across the continental United States.  Innotrac Europe GmbH has a network of fulfillment centers, call centers, and returns processing facilities with operations in the UK, Germany, France, Denmark, Sweden, Poland, Austria, Italy, Switzerland and the Netherlands.  For more information about Innotrac, visit the Innotrac Website, www.innotrac.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature.  Forward-looking statements are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected.  Among the key factors that may have a direct bearing on Innotrac's operating results, performance or financial condition are competition, the demand for Innotrac's services, Innotrac's ability to retain its current clients, Innotrac's success in growing its existing client base, developing new business, reducing operating costs in response to reduced service revenues, realization of expected revenues from new clients, the general state of the  industries that the Company serves, changing technologies, Innotrac's ability to maintain profit margins in the face of pricing pressures and numerous other factors discussed in Innotrac's 2010 Annual Report on Form 10-K and other filings on file with the Securities and Exchange Commission.  Innotrac disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise.

Contact

George Hare
Chief Financial Officer
678-584-4020
ghare@innotrac.com

INNOTRAC CORPORATION

Condensed Statements of Operations

(in thousands, except per share amounts)







Three Months Ended




December 31,


Twelve Months Ended


(Unaudited)


December 31,


2010


2009


2010


2009

Service revenue

$         20,143


$   19,253


$ 67,359


$ 87,362

Freight revenue

3,098


2,080


12,260


12,595

    Total revenue

23,241


21,333


79,619


99,957









Cost of service revenues

9,770


9,855


30,983


39,467

Freight expense

3,052


2,068


12,069


12,469

Selling, general and








   administrative expenses

9,300


9,849


35,608


40,991

Goodwill impairment

-


25,169


-


25,169

Depreciation and amortization

849


901


3,463


4,299

   Total operating expenses

22,971


47,842


82,123


122,395

Operating income (loss)

270


(26,509)


(2,504)


(22,438)

   Interest expense

52


44


183


251

       Total other expense

52


44


183


251

Income (loss) before income taxes

218


(26,553)


(2,687)


(22,689)

   Income tax

-


(167)


-


-

Net income (loss)  

$              218


$(26,386)


$  (2,687)


$(22,689)









Income (loss)  per share:








   Basic

$            0.02


$   (2.09)


$   (0.21)


$    (1.80)

   Diluted

$            0.02


$   (2.09)


$   (0.21)


$    (1.80)









Weighted average shares








   outstanding:








   Basic

12,861


12,601


12,798


12,601

   Diluted

12,861


12,601


12,798


12,601






INNOTRAC CORPORATION


Condensed Balance Sheets


(in thousands)










December 31, 2010


December 31, 2009


ASSETS




Current Assets:





Cash

$               238


$            1,118


Accounts receivable (net of allowance for doubtful
   accounts of  $242 at December 31, 2010 and $172 at
   December 31, 2009)

15,279


14,521


Inventory

3,626


3,093


Prepaid expenses and other

1,149


1,693


      Total current assets

20,292


20,425






Property and equipment, net

11,380


13,717

Other assets, net

1,122


1,061


       Total assets

$           32,794


$          35,203







LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities:





Accounts payable

$            5,920


$            5,309


Line of credit

-


-


Accrued expenses and other

4,076


4,524


      Total current liabilities

9,996


9,833






Noncurrent Liabilities:





Other non-current liabilities

1,499


1,491


      Total noncurrent liabilities

1,499


1,491







      Total shareholders' equity

21,299


23,879


      Total liabilities and shareholders' equity

$          32,794


$          35,203











INNOTRAC CORPORATION


Condensed Statements of Cash Flows


(in thousands)












Twelve Months Ended

December 31,





2010


2009


CASH FLOWS FROM OPERATING ACTIVITIES:





Net loss

$      (2,687)


$    (22,689)


Adjustments to net loss:






Depreciation and amortization

3,463


4,299



Impairment of goodwill

-


25,169



Provision for bad debts

145


47



(Gain) loss on disposal of fixed assets

(9)


69



Stock compensation expense-stock options

(1)


14



Stock compensation expense-restricted stock

108


75



Decrease in other long-term assets

65


46



Increase in other long-term liabilities

162


241



Changes in working capital:







Accounts receivable, gross

(902)


11,225




Inventory

(533)


(1,238)




Prepaid assets and other

573


(384)




Accounts payable, accrued expenses and other

142


(4,865)



Net cash provided by operating activities

526


12,009









CASH FLOWS FROM INVESTING ACTIVITIES:





Capital expenditures

(1,119)


(1,691)


Proceeds from disposition of assets

23


-


Net change in noncurrent assets and liabilities

(9)


(52)



Cash used in investing activities

(1,105)


(1,743)









CASH FLOWS FROM FINANCING ACTIVITIES:





Net repayments under line of credit

-


(10,055)


Capital lease (payments) funding

(239)


3


Loan fees paid

(62)


(152)



Cash used in financing activities

(301)


(10,204)









Net (decrease) increase in cash

(880)


62


Cash, beginning of period

1,118


1,056


Cash, end of period

$           238


$       1,118











SOURCE Innotrac Corporation